© prentice hall, 2007 excellence in business, 3echapter 14 - 1 distribution strategies
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© Prentice Hall, 2007 Excellence in Business, 3e Chapter 14 - 1
Distribution Distribution StrategiesStrategies
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 14 - 2
Marketing Marketing IntermediariesIntermediaries
RetailersRetailers WholesalersWholesalers
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 14 - 3
Wholesalers and Wholesalers and RetailersRetailers
Utility Value
PlacePlace
TimeTime
PossessionPossession
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 14 - 4
Seven Roles Seven Roles of Marketing of Marketing
IntermediariesIntermediaries
Transport and Store ProductsTransport and Store Products
Gather Assortmentof Goods
Gather Assortmentof Goods Assume RisksAssume Risks Provide FinancingProvide Financing
Provide MarketInformation
Provide MarketInformation
Match Buyersand Sellers
Match Buyersand Sellers
Provide Promotionand Sales SupportProvide Promotionand Sales Support
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 14 - 5
How Intermediaries Simplify CommerceHow Intermediaries Simplify Commerce
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 14 - 6
Types of WholesalersTypes of Wholesalers
MerchantsMerchants Agents or BrokersAgents or Brokers
Rack JobbersRack JobbersRack JobbersRack Jobbers
Limited-ServiceLimited-ServiceLimited-ServiceLimited-Service
Full-ServiceFull-ServiceFull-ServiceFull-Service
Drop ShippersDrop ShippersDrop ShippersDrop Shippers
Securities BrokersSecurities BrokersSecurities BrokersSecurities Brokers
Insurance BrokersInsurance BrokersInsurance BrokersInsurance Brokers
Real Estate AgentsReal Estate AgentsReal Estate AgentsReal Estate Agents
Manufacturer’s RepsManufacturer’s RepsManufacturer’s RepsManufacturer’s Reps
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 14 - 7
Benefits of RetailersBenefits of Retailers
Save Time
Save Money
Build Traffic
Add Convenience
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 14 - 8
Types of Retail StoresTypes of Retail Stores
LimitedProducts
LimitedProducts
ExtensiveSelection
ExtensiveSelection
SpecialtyStore
CustomerServices
CustomerServices
WideVariety
WideVariety
DepartmentStore
CategoryDominance
CategoryDominance
WideVariety
WideVariety
CategoryKiller
LowerPrices
LowerPrices
WideVariety
WideVariety
DiscountStore
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 14 - 9
Retail Industry Retail Industry
ChallengesChallenges
Oversupply ofOversupply ofStore SpaceStore Space
ConsumerConsumerDemographicsDemographics
WeakenedWeakenedEconomyEconomy
Nonstore RetailingNonstore Retailingand E-Commerceand E-Commerce
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 14 - 10
E-Commerce E-Commerce and Non-Store Formatsand Non-Store Formats
Clicks-Only InternetClicks-Only Internet
Clicks-and-BricksClicks-and-Bricks
Mail-Order FirmsMail-Order Firms
Automatic VendingAutomatic Vending
Interactive KiosksInteractive Kiosks
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 14 - 11
Retailing InnovationsRetailing Innovations
Retail TheaterRetail TheaterRetail TheaterRetail Theater
MultichannelMultichannelRetailingRetailing
MultichannelMultichannelRetailingRetailing
Pop-Up StoresPop-Up StoresPop-Up StoresPop-Up Stores
Hybrid FormatsHybrid FormatsHybrid FormatsHybrid Formats
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 14 - 12
Setting Distribution Setting Distribution
StrategiesStrategies
Distribution MixDistribution Mix
Marketing PracticesMarketing Practices
CustomerCustomerNeeds andNeeds and
ExpectationsExpectations
ProductProductSupportSupport
RequirementsRequirements
Segmentation,Segmentation,Targeting,Targeting,PositioningPositioning
Competitor’sCompetitor’sDistributionDistributionChannelsChannels
EstablishedEstablishedIndustryIndustryPatternsPatterns
Type of ProductType of Product
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 14 - 13
Distribution Channel Distribution Channel LengthLength
ConsumerConsumer
ConsumerConsumer
ConsumerConsumer
ConsumerConsumer
Business User
Business User
BusinessUser
BusinessUser
Consumer Goods and Services
Business Goods and Services
ProducerProducer
ProducerProducer
ProducerProducer
ProducerProducer
ProducerProducer
Agent/BrokerAgent/Broker
WholesalerWholesaler
WholesalerWholesaler
RetailerRetailer
RetailerRetailer
RetailerRetailer
ProducerProducer WholesalerWholesaler
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 14 - 14
Channel SelectionChannel Selection
MarketMarketCoverageCoverage
MarketMarketCoverageCoverage
CostCostCostCost
ControlControlControlControl
ChannelChannelConflictConflictChannelChannelConflictConflict
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 14 - 15
Market CoverageMarket Coverage
Distribution
Convenience Goodsand Organizational Supplies
Expensive Technicalor Specialty Products
Intensive Selective Exclusive
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 14 - 16
Cost FactorsCost Factors
Selling
Storage
Distribution
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 14 - 17
Control IssuesControl Issues
How Goods AreHow Goods AreSold in the MarketplaceSold in the Marketplace
How Goods AreHow Goods AreSold in the MarketplaceSold in the Marketplace
ChannelChannelLengthLength
OverallOverallControlControl
LongerLongerShorterShorter
LessLessMoreMore
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 14 - 18
Channel ConflictChannel Conflict
Inadequate Product SupportInadequate Product SupportInadequate Product SupportInadequate Product Support
Too Many IntermediariesToo Many IntermediariesToo Many IntermediariesToo Many Intermediaries
Multiple Sales ChannelsMultiple Sales ChannelsMultiple Sales ChannelsMultiple Sales Channels
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 14 - 19
Managing Managing Physical DistributionPhysical Distribution
In-House OperationsIn-House Operations Outbound TransportationOutbound Transportation
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 14 - 20
In-House OperationsIn-House Operations
• Forecasting
• Order processing
• Inventory control
• Warehousing
• Materials handling
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 14 - 21
Outbound TransportationOutbound Transportation
Rail
Truck
Water
Air
Pipeline
Mode
Average
Average
Lower
Higher
Average
Cost
Lower
Average
Average
Higher
Lower
Higher
Lower
Higher
Lower
Average
Higher
Higher
Average
Average
Higher
Average
Average
Lower
Higher
Lower
Flexibility Capacity Reliability Speed
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